Long supply chains can expose organisations to a wide range of risks due to the uncertainty of where and how products are sourced, which may lead to negative publicity. As environmental awareness increases, the environmental impact within supply chains becomes a bigger priority for organisations to review and stay on top of.
When looking at the full environmental impact of an organisation, examining scope 3 emissions, it’s important to explore the impact of everyone in the supply chain. This may be challenging, especially when sourcing from developing countries where reporting processes may differ, however it is rapidly becoming best practice for organisations.
In this blog, we explore why organisations should invest time and resources into sustainable procurement.
What is sustainable procurement?
Sustainable procurement is buying goods and services for your organisation that are good for the environment, ethically sourced, and socially responsible.
By definition, it includes the maintenance and disposal of these goods, where applicable, as well as the initial purchase.
When seeking to develop a sustainable procurement process, the decisions an organisation makes should benefit its customers, society, and the environment, as well as the organisation itself.
Elements of sustainable procurement include:
- Reducing negative impacts on local communities and the environment;
- Ensuring the supply chain upholds the same standards as your organisation;
- Managing supply chain risk effectively;
- Managing supplier contracts successfully;
- Managing demand for goods and services.
What are the benefits of sustainable procurement?
1. Reduced environmental impact
By requesting information about suppliers processes and influencing them to adopt more ethical ones, utilising your own buying power, not only will the end product or service your organisation produces have a reduced environmental impact but the supplier itself will be contributing less too.
Changes to process will come at a cost , however, in the long-term, it can lead to big savings. By reducing waste and increasing the efficiency of buildings, vehicles, and machinery, suppliers can quickly see returns.
2. Protecting against reputational damage
With information readily available online, your supply chain and procurement process also affects your brand reputation. It’s vital to protect your reputation to enhance business growth.
3. Potential for new partnerships
An organisation with a sustainable supply chain is an attractive prospect for other organisations looking for partners. Your environmental credentials will likely align with the values of another brand. In turn, this opens up potential partnership opportunities.
How can organisations engage suppliers with sustainable procurement?
The key to the implementation of sustainable procurement is getting your suppliers on board and agreeing on a common framework.
It is common practice to leverage purchasing power to influence supplier practices, with some firms suspending trade with suppliers who fail to comply – just as they would for non-compliance on cost, quality, or timely delivery.
However, not all firms take an enforcement approach, some organisations offer incentives to their suppliers to improve their sustainability performance.
We find that by taking a supportive and educational approach, organisations can help suppliers design and implement sustainability programs which support everyone’s growth and develop a commitment to a stronger, greener planet.
Many of the organisations we work with request that their suppliers hold environmental accreditations such as ISO 14001. Where this isn’t feasible, the Groundwork Green Dragon accreditation is a great stepping stone towards ISO 14001. Alternatively, participation in one of Groundwork’s sustainability membership schemes showcases a supplier’s commitment to improve year on year.
For suppliers who are not yet engaged in the sustainable procurement process, organisations may wish to suggest an environmental training session such as Carbon Literacy, or develop a bespoke training package which explains why there is a need for these changes and how it will benefit suppliers in the long-run.
How can Groundwork help?
If you’d like to implement a sustainable procurement process within your business our environmental consultants can help.
Contact a member of the team today to get started.
